S&P 500 ~30% loss in "real terms" staggering, leaving room for rally. Not priced for perfection. Since 1930, median P/E when 10Y 3.5% to 4.5% is 19X, and 18.5X when Fed tightening.

The risks are now more "two-sided"...Fed still wins with S&P 500 rally, as the -30% loss in "real terms" is staggering...

Stocks have continued to strengthen, and in our view, this is more than just a "dead cat bounce" (aka bear rally) as we have outlined in multiple prior reports. But even if this proves to be a "bear rally," the ingredients are in place for a rally far stronger than the "June pivot hopes" rally, which lasted 23 trading days and rose +16%.

for much of 2022, it seems...

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